ShareThisBy TERESA F. LINDEMAN
Tuesday, November 21, 2006
Shipping giant FedEx Corp. expects customers checking on packages will make almost 6 million tracking requests daily on its Web site in December, a new record.
It won't be the only company setting records this holiday season as the online world continues to become part of the normal shopping experience, forcing Web-enabled retailers and their support systems to handle larger crowds.
Jupiter Research is projecting online holiday sales this year will reach $32 billion, up 18 percent from last year. FedEx expects to break its one-day record for carrying packages with 9.8 million on Dec. 18, up from 8.9 million on last year's biggest day.
More than 70 percent of all consumers will use the Internet either to buy or research gifts this holiday season, according to Carl Steidtmann, chief economist for Deloitte Research.
While the overall pace of economic growth appears to be slowing a bit, companies involved in online shopping are trying figure out just how big electronic commerce can get _ and how to be prepared for whatever the Internet dishes out.
That's our Super Bowl here at FedEx Ground," said Mike Mannion, senior vice president of terminal operations at a subsidiary of the Memphis shipping company.
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Certainly for GSI Commerce Inc., there is no more important time.
In the last three months of the year, the e-commerce company that serves as the elf behind Web sites such as Dunham's Sports, Bath & Body Works and, for the first time this year, Toys 'R Us, is expected to help move more than $500 million in merchandise over the Web.
"We've been planning for the holiday since the end of last season," said Steve Davis, senior vice president of partner services.
Online stores have the potential to feel dated even faster than bricks-and-mortar sites. Not that long ago, just writing a product description and calculating shipping charges challenged online retailers.
Now consumers expect flashing pictures, user reviews and other bells-and-whistles.
This August, GSI unveiled a remodel for partner company, Dick's Sporting Goods, which embraces the Web's turn toward social networking. Hunters and fishermen can brag a bit, posting pictures and comments about their latest exploits. There's also a free handicap tracker for golfers. "It's a way to engage the customers even when they're not going to shop," Davis said.
Some retail partners mainly use GSI's technology, while others also need the company to operate fulfillment centers where orders are packaged and shipped.
To keep the megabytes of electronic commerce from jamming up this holiday, GSI has invested in additional computer equipment and is bringing on 1,200 to 1,300 employees for duties such as packing orders and personalizing football jerseys. Hundreds of the seasonal workers will sit in a call center answering consumer questions.
Davis also expects more consumers will take advantage of new systems allowing online orders to be picked up in stores.
He's expecting to break a few records, too. "This is going to be the biggest season that we've ever had."
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Still, the fate of the online world seems to come back around to the shipping companies such as FedEx Ground, which has been plotting strategy and running the numbers since January.
"The peak really drives our whole planning," Mannion said.
As soon as last year's holiday season wrapped up, the company's top 100 customers were asked to give seasonal projections for this year, laying the foundation for everything from route layouts to the timing of seasonal hiring.
There was a time when planning started in July, he said, but that doesn't work anymore. FedEx does not know exactly which packages are triggered by online shopping, but the peak day for package load continues to move closer to Christmas, a sign that instead of just getting merchandise to retailers, the company's services are being used to get goods to individual consumers.
Last year, FedEx Ground invested in an automated sorting system to handle small packages for its Hartford, Conn., facility where outdoor retailer L.L. Bean ships out lots of hiking boots, hats and fleece throws. That equipment will be used to its full potential this year, Mannion predicted.
Temporary facilities are being opened to handle seasonally heavy loads in markets such as the Baltimore-Philadelphia corridor. Seasonal employment begins to pick up in September, with this year total expected to hit 7,500. "Each week we will add more seasonal hires," Mannion said.
Meanwhile, the season is expected to last longer than in the past. Gift card popularity has given consumers another excuse to shop even more.
FedEx Ground's headquarters have already begun to ring with regular conference calls checking on strategies and loads. At the height of the holiday shopping crush, there's one room where the phones can be counted on to stay busy all day as every region across the country _ starting with the East Coast and heading West with the sun _ checks in with daily reports.
"It's all about the planning," Mannion said. "You can't leave anything to chance."
